Suppose we have two firms that operate in the logging industry (dangerous). At the extremes, Firm...

 

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Suppose we have two firms that operate in the logging industry (dangerous). At the extremes, Firm A can provide a wage rate of $50 and no safety or 5 safety units and no wage. At the extremes, Firm B can provide a wage rate of $25 and no safety or 15 safety units and no wage. a. Graph this setup. Make sure to include isoprofit curves for both firms A and B as well as an indifference curve for each type of worker that would work at firm A or B. (3 points) b. Would a worker work at firm B for a wage of $1 over firm A? Justify your answer. (4 points) Suppose we have two firms that operate in the logging industry (dangerous). At the extremes, Firm A can provide a wage rate of $50 and no safety or 5 safety units and no wage. At the extremes, Firm B can provide a wage rate of $25 and no safety or 15 safety units and no wage. a. Graph this setup. Make sure to include isoprofit curves for both firms A and B as well as an indifference curve for each type of worker that would work at firm A or B. (3 points) b. Would a worker work at firm B for a wage of $1 over firm A? Justify your answer. (4 points)